Thailand enjoys long sunshine hours. Its capital city, Bangkok, has an average year-round temperature of 24-degrees Celsius with over 1,800 sunshine hours/year. Central and Northeastern Thailand have over 1,850 hours of sunshine per year. These conditions are suitable for the development of the solar market, says Digitimes Research.
Thailand relies on natural gas to generate electricity. As resources deplete and the price of imported energy rises, the government originally intended to reduce its reliance on natural gas by adopting nuclear power. However, this motion has faced significant opposition within the country. Hence, the government has turned to developing renewable energy. In 2007, the government began to implement Adder, a subsidy program of buying back electricity at THB6.5/kWh (US$0.21/kWh) for solar-generated power. In some special areas (affected by political unrest or not connected to the grid and so used diesel to generate power), the subsidy was set at THB8/kWh, a lot higher than the price of conventional electricity of THB2.5/kWh. The amount of solar installations connected to the grid jumped from 1.44MW in 2007 to 120.1MW in May 2012. Nevertheless, Adder does not have a comprehensive framework. To stimulate development, application due dates were postponed which significantly increased the number of applications. This has placed a heavy burden on the government's budget, pushing the government to stop taking in applications and look for ways of modifying the policy.
Thailand does not have a complete solar supply chain as the country needs to import modules and related components. This has been the reason for the high price of solar PV systems in the country. In addition, the central government has various development plans which have different targets. Through investment support and Adder, the country has been attracting international firms to enter the market despite the long time taken to process subsidy applications. Furthermore, the government plans to include rooftop systems and lower subsidy requirements for Adder to increase the solar market size in Thailand.
